Keep Your Future on Course Protect Your Most Valuable Asset

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1 Keep Your Future on Course Protect Your Most Valuable Asset Disability Income PROTECTION

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3 Contents Your Most Valuable Asset 1 Disability Could it Happen to You? 2 The Leading Causes of Disability 3 ProVider Plus Disability Insurance Key Features 4 ProVider Plus Optional Benefit Riders 10 Designing the Coverage You Need 13

4 Your income is your most valuable asset

5 Why You Need Insurance You insure your most valuable tangible assets: your home, auto and valuables. Do you insure your income? Your income is your most valuable asset one that makes owning your home and automobile possible. But have you considered that your income also determines your current standard of living and provides for your long-term financial goals? Unfortunately, it s all at risk if you cannot work as the result of a disability and disability is much more common than you think. That s why purchasing a disability income insurance policy to help protect your income is one of the most responsible decisions you ll ever make. Learn how a ProVider Plus disability insurance policy can protect your standard of living from the impact of a disability. 1

6 Some Perspective on risk Disability Could it happen to you? Most of us don t want to think about struggling financially in the event we weren t unable to work. Yet it s a possibility we all must consider, especially since disability is a common problem. Most people don t have adequate savings to support them for an extended period of time. 2

7 The Causes of Disability The Leading Causes of Disability * 90% Illness 10% Injury When you think disability, do you think accidents? If so, you re in for a surprise, because the leading sources of disability are muscle, back and joint problems; cancer; injuries and poisoning; heart disease; and mental disorders. Major Disablers % of New Claims* Musculoskeletal/ 28% Connective tissue Cancer 14% Injuries & poisoning 10% Cardiovascular 8% Mental disorders 9% Nervous system-related 7% * 2013 CDA Long-Term Disability Claims Review, Council for Disability Awareness. 3

8 key features Key features to look for in a high-quality disability income insurance policy It s important to understand how income protection policies work, and how they differ from company to company. Here are the key features to look for when you evaluate individual disability income policies: 1 Renewability provision maintaining your protection Key Difference Renewability provisions define your rights in maintaining your disability income protection. Look for a policy that is both non-cancellable and guaranteed renewable. When a policy is guaranteed renewable only, it will remain in force as long as you continue to pay for your policy on time, but the insurance company may increase your premium. When your policy is both non-cancellable and guaranteed renewable, as ProVider Plus is *, your policy will be renewed each year at a guaranteed locked-in premium as long as you pay your premium on a timely basis. * ProVider Plus is non-cancellable and guaranteed renewable to age 65 (or 67 with a To Age 67 benefit period), after which it is conditionally renewable for life, if you are gainfully employed full-time. That means that after this time, your premiums can change on an annual basis. ** A different definition of total disability applies to policies issued in California. Contact your agent or broker for complete details. 4

9 2 The policy s total disability definition the key factor in how valuable the policy will be to you during a disability Key Difference ProVider Plus offers you options so that you can choose the definition of total disability** that best serves your unique circumstances. The choice is made at the time that you initially purchase your policy. With our modified own-occupation definition of total disability, you will be eligible for total disability benefits when, solely due to injury or sickness, you are not able to perform the material and substantial duties of your occupation and you are not gainfully employed. Our true own-occupation definition of total disability makes it possible for you to work in another occupation and still be eligible for total disability benefits. Under this definition, you are considered totally disabled if, solely due to injury or sickness, you are not able to perform the material and substantial duties of your occupation, even if you are at work in another occupation. Medical and dental specialists will also appreciate our specialty language: If you have limited your occupation to the performance of the material and substantial duties of a single medical or dental specialty, we will consider that specialty to be your occupation under the true ownoccupation definition of disability. Compare disability income policies carefully before you buy. Many don t provide true own-occupation coverage or specialty language the way ProVider Plus does. Key Difference 5

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11 key features 3 Built-in provisions that offer more protection and stronger coverage Key Difference Waiver of Premium Benefit A ProVider Plus advantage The last thing you should have to worry about during a disability is paying your policy premium. So when a disability occurs and benefits are paid, only ProVider Plus will Refund any premiums you have paid that apply to the period of disability, and Waive your premium for as long as you re disabled and receiving benefits in the same claim, and continue to waive your premiums for six months following your recovery. Key Difference A Choice of Five Benefit Periods The benefit period is the longest length of time you ll be paid monthly benefits for a disability from the same cause. With ProVider Plus, you can choose from 2, 5, and 10 years; To Age 65, and To Age 67 benefit periods. Generally, the shorter the benefit period, the lower the premium will be. 7

12 Key Difference Waiver of Elimination Period All policies have an Elimination Period (or Waiting Period). This is the period of time that must elapse before benefits become payable. With ProVider Plus, you get a built-in waiver of elimination period. In the event of disability, this feature can result in your receiving more benefits and getting them sooner than you would from other policies. With ProVider Plus, the elimination period will be waived for any subsequent disability related or unrelated to the original disabling condition that occurs within five years of the end of the previous disability. We don t require a new elimination period if your original disability lasted more than six months and we paid benefits for that disability. Scenario You have a heart attack and you re Totally Disabled for 7 months. After satisfying the elimination period, you received benefits. Then you recover. Month* Status ProVider Plus Other Policies 1st 3rd Disabled EP EP 4th 7th Disabled $40,000 $40,000 8th 54th Recovered $0 $0 55th 57th Disabled $30,000 EP Within 5 years, you become disabled again, from any cause whether residual effects of your previous heart attack or another cause, such as a car accident. With ProVider Plus, you wouldn t need to satisfy another elimination period requirement. Chart Assumptions: $10,000 monthly benefit, 90-day elimination period. *The elimination period of a disability insurance policy may be referred to in days or months. The ProVider Plus elimination period is expressed in terms of days. For the purpose of this illustration, one month equals 30 days. 8

13 Key Difference Convenient Payment Options With ProVider Plus, you can choose to have your monthly premium automatically deducted from your bank account without the built-in finance charges other companies might impose. Or you can make quarterly, semi-annual, or annual payments. Presumptive Total Disability Benefit Key Difference Extra protection when you need it most With the ProVider Plus Presumptive Total Disability Benefit, we ll consider you totally disabled if sickness or injury results in the total and complete loss of sight in both eyes, hearing in both ears, speech, use of both hands or feet, or lost use of one hand and one foot in their entirety. We ll also waive any unexpired part of the elimination period from the date of such loss. And, we ll pay your monthly benefit as long as your total disability continues. 9

14 optional benefit riders Personalize your policy with these optional benefit riders ProVider Plus offers comprehensive coverage plus the flexibility to customize your policy to the unique needs of your situation. Consider how valuable the ProVider Plus policy can be to you in the event that a disability limits your ability to replace your lost earnings while you recover or for the balance of your life. 10

15 If you want coverage for these situations: To protect your income in the event that your ability to work is limited, or you return to work but not at your pre-disability level of income To help ensure that your benefit keeps pace with inflation To increase your benefits as your income grows regardless of any changes to your health To receive extra protection from the financial impact of severe disabilities resulting in cognitive impairment, the loss of two or more Activities of Daily Living, or irrecoverable loss of sight, hearing, speech or use of limbs To help ensure your ability to save for retirement in the event you become disabled To ensure disability coverage beyond your normal retirement age To help offset missed wealth accumulation opportunities from a period of disability To ensure you ll be able to continue making your student loan payments Ask your insurance professional about this extra coverage and your eligibility. Residual Disability Benefit Rider* Cost of Living Adjustment Rider three options to protect against rising costs Future Increase Option Rider Catastrophic Disability Benefit Rider includes an automatic annual compounded 3% increase Retirement Protection Plus (RPP) Disability Benefit Rider** Graded Lifetime Indemnity for Total Disability Rider Lump Sum Disability Benefit Rider Student Loan Protection Rider * The Residual Disability Benefit is called the Partial Disability Benefit Rider in California. This optional rider is not necessarily protection against increases in the cost of living. Cost of Living Adjustment increases stop after age 65. Should your policy be renewed after that, you can retain the increase by paying then-current renewal rates. Subject to financial underwriting requirements based on your then-current income and disability insurance in force, for which you have applied, or which you are eligible to receive. ** Retirement Protection Plus is not a pension plan or a substitute for one. This optional rider is not available in California. It provides an indemnity which decreases based on the age of the insured at the time of the start of a period of total disability. 11

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17 Designing the coverage you need There are many factors to consider when designing the policy that is right for your particular situation. To make the best choices, it s important to understand the options when weighing value and cost and how you really want your policy to perform. Consider these things: _How much monthly benefit will I need? _ How soon will I need the benefits following the disability? _How long should benefits last? Do I want the policy to keep pace with increased earnings? Do I need to protect my retirement savings? Should I consider a catastrophic disability? Do I have student loan payments that need protection? 13

18 Protect your most valuable asset and safeguard your lifestyle by choosing ProVider Plus. Contact your licensed insurance representative to find out how a customized ProVider Plus policy can protect your future. 14

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20 Disability income insurance policy form 1400, 1500 and 1600 underwritten and issued by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, NY. Product provisions and availability may vary by state. Optional riders are available for an additional premium. This policy provides disability insurance only. It does not provide basic hospital, basic medical or major medical insurance as defined by the New York State Insurance Department. For policy forms 1400, 1500, or 1600, the expected benefit ratio is 50% (including NY 1400). For policy forms 1400-F, 1500-F, or 1600 F, the expected benefit ratio is 60% (NY only). The expected benefit ratio is the portion of future premiums that the company expects to return as benefits, when averaged over all people with these policy forms respectively. This publication is provided for informational purposes only and should not be considered tax or legal advice. Please contact your tax or legal advisor regarding the tax treatment of the policy and policy benefits. You should consult with your own independent tax and legal advisors regarding your particular set of facts and circumstances. The information provided is not intended or written to be used, and cannot be relied upon, to avoid penalties imposed under the Internal Revenue Code or state and local tax law provisions. Berkshire Life Insurance Company of America 2013 All Rights Reserved. The Guardian Life Insurance Company of America 7 Hanover Square New York, NY Pub4228BL (01/14) (Expires 01/16) 16